If you are importing goods into the UK from specific regions of the world then you will have to pay import vat whenever you import goods from eu special territories as well as from non eu countries. This tax is collected by the hmrc vat department or hm revenue and customs department at the port or airport itself and also the goods are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of goods and services that are governed by customs duties, excise duties and import vat. Most alcohol and tobacco products www.vatcheck.com together with certain activities like gambling are subject to excise duties while almost every other imports come under customs duties and import vat according to the goods and also the country from where they arrive.
The hmrc has specified eu special territories where import vat is going to be levied if goods or services are brought in or sent to such territories. They are The French Overseas Departments of Guadeloupe, The Canary Islands in Spain, The Aland Islands in Finland, French Guiana, Mount Athos and Reunion and Martinique in Greece, and also the Channel Islands in the UK. This vat may also be levied whenever you import goods from non eu countries.
However, if you are a vat registered trader in the United Kingdom then you can apply for a vat refund in case you have already paid vat on any goods in the nation of origin itself before being imported into the UK. You may also offset this vat against sales vat if the products which you have imported are sold in the local UK market. Countries such as the UK and Italy also offer special vat deferment schemes where one can get respite from import vat for approximately one month by filing out a unique vat form with the hmrc and opening of a special vat deferment account with them. This move would help safeguard your cash flow.
Once you start selling your services or goods in the local market then you’ll also have to charge any local sales vat rate to the clients. You will have to make vat invoices that specifically mention vat rates as well as file regular vat returns. If you have problem in understanding various duties and taxes imposed by the hmrc then you definately should hire the services of a proficient vat and customs agent. This may allow you to concentrate on expanding your business while all relevant paperwork and payment of taxes and duties is handled in an efficient manner.
The import vat rates are exactly like sales vat rates of similar products sold in the United Kingdom. The UK has 3 vat rate slabs. The very first is the normal vat rate of 17.5% which is slated to rise to 20% from January 4, 2011. Second is the lower vat rate of 5% while the third is zero vat rate. There are also certain products or services that are totally exempt from any vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK so that you can calculate the charges with an accurate basis. You should use all legal avenues to reduce your costs like vat refunds, vat deferments, etc so that you can lower your costs further and enhance the income of your respective business. You should diligently pay import vat when you import goods from eu special territories or from non eu countries and employ the services of an efficient vat agent to claim additional vat back.